West v Nationwide News Pty Ltd t/as Cumberland Newspaper Group

[2003] NSWSC 505

CITATION:	West & Anor v Nationwide News Pty Ltd t/as Cumberland Newspaper Group [2003] NSWSC 505
HEARING DATE(S):	Monday 12 - Friday 16 May 2003
JUDGMENT DATE:	15 August 2003
JUDGMENT OF:	Simpson J
DECISION:	In relation to imputations (a), (d), (f) and (i): (i) verdict for the defendant; in relation to the imputations (c), (h), (e) and (j): (ii) verdict for the first plaintiff in the sum of $20,000 (iii) verdict for the second plaintiff in the sum of $30,000; I will hear the parties in relation to costs, interest, and any other matters that remain outstanding; I will direct the parties, in due course, to bring in short minutes of order reflecting my conclusions.
CATCHWORDS:	defamation - substantial truth - contextual imputations - s13 - the unlikelihood of harm - fair protected report - qualified privilege - damages - aggravated damages - falsity of the imputations - failure to make enquiries - conduct of the litigation
LEGISLATION CITED:	Defamation Act 1974, (NSW) s7A, s13, s15, s16, s22, s24, ss32-33 Evidence Act 1995, s140
CASES CITED:	Adam v Ward [1917] AC 309 Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419, unreported, 24 December 2002 Andrews v John Fairfax and Sons Ltd [1980] 2 NSWLR 225 Braddock v Bevins [1948] 1 KB 580 Briginshaw v Briginshaw (1938) 60 CLR 336 Cassell and Co Ltd v Broome [1972] AC 1027 Chakravarti v Advertiser Newspapers Limited (1998) 193 CLR 519 Channel Seven Sydney Pty Ltd v Parras [200] NSWCA 202, unreported, 1 July 2002 Clark v Ainsworth (1996) 40 NSWLR 463 Cotter v John Fairfax Publications Pty Ltd [2003] NSWSC 503, unreported, 22 July 2003 Fortunate Investments Pty Ltd v North Sydney Council [2001] NSWLEC 70, 15 March 2001 Howden v "Truth" and "Sportsman" Ltd (1937) 58 CLR 416 John Fairfax and Sons Ltd v Vilo [2001] NSWCA 290; 52 NSWLR 73 John Fairfax Publications Pty Ltd v Blake; David Syme & Co Ltd v Blake [2001] NSWCA 434; 53 NSWLR 541 Lange v The Australian Broadcasting Corporation (1997) 189 CLR 520 Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 Nationwide News Pty Ltd v Rogers [2002] NSWCA 71, unreported, 15 March 2002 Roberts v Bass [2002] HCA 57; 77 ALJR 292 Sutherland v Stopes [1925] AC 47 Vilo v John Fairfax and Sons Ltd [2000] NSWSC 937, unreported, 6 October 2000 Watt v Longsdon [1930] 1KB 130
PARTIES :	Robert West - 1st Plaintiff Fortunate Investments Pty Ltd - 2nd Plaintiff Nationwide News Pty Ltd t/as Cumberland Newspaper Group - Defendant
FILE NUMBER(S):	SC 20752/01
COUNSEL:	CA Evatt with JE Rawlings 1st & 2nd Plaintiffs TS Hale SC - Defendant
SOLICITORS:	AJ Turner - 1st & 2nd Plaintiffs Cropper Parkhill - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

SIMPSON J

Friday 15 August 2003

20752/01 Robert West & Anor v Nationwide News Pty Ltd T/A Cumberland Newspaper Group

JUDGMENT

1 HER HONOUR: In these proceedings, the first plaintiff, Robert West, and the second plaintiff, Fortunate Investments Pty Ltd (a company of which the first plaintiff and his wife are directors and shareholders) sue the defendant, Nationwide News Pty Ltd (which trades as the Cumberland Newspaper Group) in defamation.

2 The defendant is, admittedly, the publisher of a weekly newspaper (the Mosman Daily) that circulates primarily in the Mosman and lower north shore area of Sydney. In the edition of the newspaper which appeared on 26 July 2001, it published the following:

“1 Buyers ‘misled’

2 A boarding house which received court permission to strata is advertising flats for sale at an address which does not exist, North Sydney Council believes.

3 And councillors fear that means people buying them will not know they have bought into a boarding house when they do their search.

4 The development, in Broughton St, Kirribilli, is being advertised with a Humphrey Place address.

5 Mayor Genia McCaffery said the council had refused permission for the boarding house development to be strata titled because it wanted to keep low-cost housing in the area. The developers then went to court and obtained approval to strata them.

6 Cr McCaffery said it had received “all the advantages of a boarding house” from a planning point of view. “The trouble is, people are being misled.”

7 After the meeting she explained the advantages for boarding houses: council relaxed its landscaping requirements “because we are trying to promote low-income housing”.

8 “Then if it ends up not being low-income housing they have the added development,” she said.

9 People buying would probably not realise they had bought into a boarding house, with shared kitchens and bathrooms, Cr McCaffery said.

10 “It’s still technically a boarding house,” she said. “We begged the court not to approve the strata … we want people to realise what they are buying.”

11 Councillor Therese Delanty said if people did a search “they would find nothing, because it doesn’t exist (at that address)”.

12 Councillor Michel Reymond, who raised the matter, said he was concerned that the strata units were being advertised “as though the fact that it was a boarding house doesn’t exist”.

13 Council planning head Sue Frances said she was happy to write to the selling agent to point out the reality as a “fair trading issue”.

14 But, she said, the onus was on them, not the council, to tell people the units were part of a boarding house.” (exhibit A: the paragraph numbers have been added to facilitate reference)

A by-line identified the author as a Sue Hicks.

3 By statement of claim originally filed on 3 September 2001, the plaintiffs commenced these proceedings. On 14 May 2003 a jury empanelled pursuant to s7A of the Defamation Act 1974 found that, (although neither was named) both plaintiffs were identified as having been referred to in the article, and that the article conveyed four imputations defamatory of each. The imputations concerning each plaintiff were in relevantly identical terms. They were:

“(a)(f) [That he/it] misled buyers because he [it] caused flats to be advertised for sale at an address which does not exist.

(c)(h) [That he/it] is a cheat in that he [it] offers flats for sale to the public when they really would be buying into a boarding housed with shared kitchens and bathrooms.

(d)(i) [That he/it] has deceived members of the public by inducing them to believe they would be buying flats when in fact they would be buying into a boarding house with shared kitchens and bathrooms.

(e)(j) [That he/it] did not trade fairly.”

(Imputations numbered (b) and (g) were, apparently, not found by the jury to have been conveyed.)

4 The defendant thereupon filed a defence to the statement of claim. It pleaded virtually every defence known to the defamation law. It denied that the plaintiffs had been injured in credit and reputation and raised specific defences. These were:

(i) a defence that each imputation was substantially true and related to a matter of public interest; or alternatively that each imputation was substantially true and was published under qualified privilege ( Defamation Act, s15(2)) ;

(ii) a defence of contextual truth ( Defamation Act, s16(2));

(iii) a defence that the circumstances of the publication were such that the plaintiffs were not likely to suffer harm ( Defamation Act, s13);

(iv) a defence that the publication constituted a fair protected report ( Defamation Act, s24);

(v) a defence of qualified privilege ( Defamation Act, s22, and at common law );

(vi) a defence that the publication related to matters of government or political concern and was protected by a right to freedom of communication pursuant to the Australian Constitution (described as a “Constitutional Defence”);

(vii) a defence of comment ( Defamation Act, ss32 and/or 33 ).

All defences except the last, of comment, were pursued at the trial.

background

5 The area of factual dispute was relatively narrow, although the dispute as to inferences to be drawn from uncontroversial facts was not so confined.

6 The first plaintiff described himself and the second plaintiff as developers. Some time in or before 1997 the second plaintiff became the registered proprietor of real estate at 31-33 Broughton Street, Kirribilli. The property had a rear entry through what appears to be a laneway called Humphrey Place. At the time the second plaintiff purchased the property it consisted of commercial premises, occupied by a pharmacy and a TAB, behind which were two residential flats. The plaintiffs proposed to develop the site, retaining the two commercial premises, which opened onto Broughton Street, and increasing the residential accommodation from two flats to ten. Access to the flats would be from Humphrey Place. The plaintiffs recognised that there were significant restrictions on the nature of the development which would be permitted, and the use to which any development could be put. This was, in part, because of inadequacy of parking facilities, but, more importantly, because policy of the North Sydney Council (“the Council”), in whose local government area the property is situated, required retention of certain residential premises as “low-cost accommodation”. The plaintiffs therefore proposed to develop the property in such a way that it would be classified as a “boarding house” within the terms of the Council’s then current Local Environmental Plan (“LEP”) 1989. A “boarding house” is therein defined as:

“ … a residential building that is let in lodgings which primarily or principally provide lodgers with a principal place of residence but does not include backpackers’ accommodation, serviced apartments or a motel.”

7 For present purposes a “boarding house” will be treated as having a technical meaning. Besides the features which emerge from the LEP definition, there are other ramifications attached to the concept. One is that the accommodation is required to be let to “lodgers”; it may not be owner occupied. A second feature is that letting to lodgers should be for a minimum term of three months. This, presumably, is intended to avoid the use of the accommodation by tourists or backpackers on a short-term basis. These restrictions are designed to implement the low-cost residential accommodation policy of the Council.

8 The plaintiffs had considerable difficulty securing approval for their proposals. Initially, in late 1997, a development application for an eight room boarding house, with shared bathroom and kitchen facilities, a common room and a caretaker’s room, was approved, but a later building application was refused by the Council. The second plaintiff appealed against this decision to the Land and Environment Court and was granted approval.

9 The plaintiffs then proposed a modification of the proposal, and this was refused by the Council but approved (subject to conditions) on a further appeal to the Land and Environment Court. Yet another development application (in August 2000) was refused by the Council, but also approved (again subject to conditions) by the Land and Environment Court.

10 In February 2000 the plaintiffs wrote to the Council seeking the creation of an additional street address, from Humphrey Place, to the property. This, they said, was because Humphrey Place provided the only entrance to the proposed residential portion of the building. The following month the Council granted the application and allocated the number 40 to the Humphrey Place entrance (exhibit G).

11 The detail of the various applications and appeals need not be related. It is sufficient to say that the concern of the Council emerges with some clarity from the documents put before this court. That was to maintain the use of the premises as a boarding house (within the terms of the definition and restrictions imposed by the LEP on such a development). The applications progressively made by the second plaintiff showed increments in the independence of each proposed unit. For example, from an initial proposal involving shared bathroom and kitchen facilities, the plaintiffs progressed to a proposal in which each unit had its own bathroom facilities and a basic kitchen. This latter consisted of a sink, a small refrigerator and “plug-in” facilities: that is, provision for an electric jug, toaster and microwave or “plug-in” oven. By the time of the final proposal, each unit was shown to be essentially self-contained. There was, in addition, on the ground floor, a fully equipped communal kitchen. There was, by then, no provision for caretaker’s accommodation.

12 Notwithstanding the self-contained nature of the units in this proposal, it was always accepted that consent would only be forthcoming to a development which retained the character of the premises as a “boarding house”.

13 The final orders made by the Land and Environment Court (see Fortunate Investments Pty Ltd v North Sydney Council [2001] NSWLEC 70, 15 March 2001, per Pearlman J) did, as I understand it, two things. They required the second plaintiff to impose a positive covenant, to be entered into by all purchasers, to agree to a specified Plan of Management and House Rules. The intention and effect of the covenant was to entrench the use of the property as a boarding house. This requirement was framed as a condition of approval.

14 Subject to that condition, the second thing done by the orders made by Pearlman J was to permit both a stratum and a strata subdivision of the premises. This meant that each unit could be sold individually.

15 During the course of the hearing the premises as so divided were referred to as a “strata boarding house”. It was common ground that this was a novel concept, possibly unique.

16 Building work proceeded, and by the middle of 2001 the plaintiffs were ready to market the units.

17 In September 2000 and thereafter the plaintiffs (through their agent, Ms Wendy Mason of Century 21 Blues Realty Aust) placed advertisements in newspapers, including the Sydney Morning Herald (“the SMH”) and the Mosman Daily calling for “expressions of interest” in what they described as (for example):

“A rare business opportunity to purchase 10 brand new self-contained bed-sitter style apartments, most with balconies.”

18 In at least one advertisement the invitation was specified to be one:

“ … to purchase in one line 10 brand new studio-style aparts…”

19 From June 2001 the advertisements were in the following terms:

“- 10 studio-style apartments
- Fully furnished and equipped
- Quality appointments
- Views and privacy
- Large decks and balconies
- Perfect location

A unique business opportunity
40 Humphrey Place”

20 A sample of the advertisements became exhibit 12. Some were placed in a section of the newspaper reserved for “Apartments”, others were placed in the Commercial Property section of the SMH. None of these advertisements contained any direct or explicit statement identifying the status of the development, that is, that it was, in technical terms, a “boarding house”. A brochure (exhibit E) was prepared which, on its front page, contained much the same kind of material. Of present significance, the front page of the brochure contained, in block letters, the words:

“NEW STRATA RESIDENTIAL INVESTMENT”

and

“UNIQUE BUSINESS OPPORTUNITY”

21 The typescript on the front of the brochure was accompanied by two photographs, showing a balcony, a waterway with boats, and the interior of a residential apartment.

22 The second page of the brochure was in typescript, again in block letters:

“RESIDENTIAL INVESTMENT”.

It showed the address as “40 Humphrey Place, Kirribilli”.

23 Under a subheading “PRELIMINARY” appeared the following:

“A development consent was granted by the Land and Environment Court for a ten unit “Boarding House” fronting Humphrey Place above two shops fronting Broughton Street. … A later approval was also granted by the Court approving both a Torrens title (three Lot subdivisions (STRATUM) and a (STRATA) subdivision of Lot 3 (the ‘boarding house’) fronting Humphrey Place.”

24 The next paragraph was headed, again in block letters:

“BOARDING HOUSE”

and was in the following terms:

“Essentially a ‘Boarding House’ provides residential lettable/ rental accommodation and ‘generally’ not to be owner occupied. ( For more detail refer to the Plan of management & House rules.) ”

The remainder of the brochure consisted of floor plans (of the first floor, and “attic floor” but not, significantly, of the ground floor) and a price list.

25 Through their agents the plaintiffs embarked upon what appears to have been a fairly intense marketing program. They placed posters or placards over the commercial premises. These were all in substantially similar terms to the advertisements and the brochure to which I have already referred.

26 From a date not specified in the evidence (but which I infer to be about June 2001) the premises were regularly open for inspection. The marketing campaign proved to have been a very successful one because, on the first day that the units were open for inspection, very large numbers of members of the public attended. Ms Mason, with another Century 21 agent, was in attendance, as was (on some occasions at least) the first plaintiff. Large numbers of the brochure (exhibit E) were available. Copies of the proposed contract of sale were also available. A number of copies of the contract were handed to prospective purchasers who evinced an interest in purchase, and a number of others were sent to solicitors nominated by such individuals.

27 One such interested person was Mr Alan Wilde, a quantity surveyor who was interested in purchasing an apartment as an investment. He and his wife inspected the units in July. Mr Wilde was so impressed by what he saw on his inspection that he and his wife wished to secure a purchase immediately. No doubt this resolution was strengthened by his being told by Ms Mason that seven of the ten units had already been sold. So enthusiastic was Mr Wilde that he paid a deposit, which must have been no more than a holding deposit, of $30,000. He consulted his solicitor, Mr Maxwell Menzies, the following Monday. Mr Menzies received a copy of the contract on about 9 or 10 July. On examination of the contract Mr Menzies lost no time in pouring cold water on Mr Wilde’s enthusiasm. He pointed out to Mr and Mrs Wilde that what they were seeking to purchase was a room in a boarding house and he drew to their attention what he perceived as the significant disadvantages of such a purchase. Coincidentally, another client of Mr Menzies, a Mr Fong, with his wife and daughter, also sought Mr Menzies’ advice on the contract, also contemplating purchase. Mr Menzies gave them similar advice. Neither the Wildes nor the Fongs proceeded with the purchase.

28 In cross examination Mr Menzies said:

“ … it was all very helpful in the contract, the terms and conditions of the court approval and the development consent were all there, have to have them all in there and it was very easy and quick for me to come to grips with it.” (T221)

29 Mr Menzies returned the copy of the contract issued in the Wilde’s name to Century 21, together with a “with compliments” slip on which he wrote the following:

“Not proceeding because a boarding house!”

30 Later, possibly after having seen the Fong contract, he telephoned Century 21. He appears to have spoken to somebody called Jane, who made a file note of the matters raised by him. “Jane” reduced these matters to a series of six questions which she conveyed to the first plaintiff. Mr Menzies’ queries included the liability for GST of a purchaser, responsibility for replacing items lost or damaged, by whom rental was to be fixed, and the absence of a communal kitchen, contrary to the plans shown on the development application which was included in the papers attached to the contract. (This last appears to be a misunderstanding.)

31 On 16 July 2001 a meeting of the Council took place. The minutes (exhibit 21) show that those present included the Mayor, Genia McCaffery, and Councillors Delanty and Reymond. Item 763 was identified as “Notice of Motion No 17/01 by Councillor Reymond 10/07/01”.

32 The minutes show that the proposal by Councillor Reymond was that the Council call for a report on a series of matters concerning 31-33 Broughton Street Kirribilli. Reference was made to the consent given by the Land and Environment Court for the strata subdivision of the boarding house and to individual strata units subject to the registration on title of a plan of management dealing, in substance, with the use, occupation and management of the building as a boarding house. It was stated:

“Units in the boarding house are now currently being advertised for sale without any apparent reference to the units being part of a Court approved boarding house.”

33 Reference was made to the advertising of the property with a Humphrey Place address, and other matters.

34 The minutes do not record the discussion which followed.

35 Present at the meeting was Ms Sue Hicks, the author of the Mosman Daily article, who was then a journalist employed by the defendant. Ms Hicks took, in shorthand, notes of the discussion. A copy of the shorthand notes is exhibit 25. A typewritten transcript of the notes is exhibit 26. I will return to the contents of the notes when I come to consider the defence of fair report.

36 Despite the initial intense interest in the project, by the end of 2001 only three contracts had been exchanged. One of the units was bought by the first plaintiff’s mother. As a result the plaintiffs decided, presumably in order to obtain some return on their investment, to enter into licence agreements with lodgers. A number of the units were licensed in this way. Nevertheless, the plaintiffs continued, through Century 21, to advertise the units for sale. On 11 August 2001 and thereafter, the standard advertisement, which continued in essentially the same terms, included the words “only 3 left”. This, plainly, was not the unadorned truth. Seven units remained unsold. The advertising gave the misleading impression that seven units had been sold. That form of advertising had been adopted, the first plaintiff explained, because of the licence agreements, and because, even if access to the licensed units could have been obtained in order to permit inspection, the apartments could not, while occupied, have been presented to their best advantage.

the defences

37 I turn now to consider the various defences raised on behalf of the defendant. It will be necessary to refer more extensively to the evidence.

(i) substantial truth

38 By s15(1) of the Defamation Act (“the Act”), the truth of any imputation alone is not a defence. By s15(2) there is a defence as to any imputation that the imputation is a matter of substantial truth and either relates to a matter of public interest or is published under qualified privilege.

39 The question of public interest can be quickly, and uncontroversially, disposed of. I am satisfied that the marketing of real estate, particularly real estate which has unusual and not commonly understood qualities as to the uses to which the property may be put, is a matter of public interest. So also is concern expressed by a local council about the manner in which a particular piece of real estate is being, or is to be, marketed. No argument to the contrary was advanced. Accordingly, and leaving aside any question of qualified privilege since it is unnecessary here to embark upon that, if any of the imputations is or are shown to be substantially true, then the defendant will not be liable in respect of that imputation or those imputations.

40 The first matter to consider is what the defendant has to prove in order to succeed in the defence of justification. It is significant that s15 provides for a defence that the imputation is “a matter of substantial truth” – not absolute truth. That is in accordance with common law principles which predate the enactment of the Act in 1974. Senior counsel for the defendant cited a well known passage from the House of Lords’ decision in Sutherland v Stopes [1925] AC 47. Lord Shaw of Dunfermline said:

“It remains to be considered what are the conditions and breadth of a plea of justification on the ground of truth. The plea must not be considered in a meticulous sense. It is that the words employed were true in substance and in fact. I view with great satisfaction the charge of the Lord Chief Justice when he made the point perfectly clear to the jury, that all that was required to affirm that plea was that the jury should be satisfied that the sting of the libel, or, if there were more than one, the stings of the libel should be made out. To which I may add that there may be mistakes here and there in what has been said which make no substantial difference to the quality of the alleged libel or in the justification pleaded for it.”

His Lordship went on to illustrate his point, in terms that do not need to be reproduced.

41 That principle was endorsed by the High Court of Australia in Howden v “Truth” and “Sportsman” Ltd (1937) 58 CLR 416 at 424-5. Evatt J (as he then was) wrote:

“In order to establish the truth of a publication containing defamatory matter, a true and not a misleading picture must be presented to the reader …”

42 His Honour went on to extract two passages from Libel and Slander: Gatley, 2nd edition, 1929, as follows:

“The plea of justification must be not only as broad as the literal language of the libel, but as broad as the inferences of fact necessarily flowing from the literal language - … Lastly, to succeed in a plea of justification, the defendant must prove the truth of all the material statements contained in the libel; there must be a substantial justification of the whole libel.” (The emphasis is in the extracted passage of the judgment of Evatt J.)

43 This passage must, for NSW, be adapted to accommodate changes made by the passing of the Act. What must now be proved to be substantially true is any imputation found to have been conveyed, and to be defamatory.

44 For reasons that will become apparent, the application of this principle is of particular significance in the consideration of the defence of justification advanced in relation to imputations (c) and (h), and (d) and (i).

45 It was to issues of substantial truth that a great deal of the evidence was directed, and which gave rise to the need for the rather lengthy factual outline above.

The onus of proving the substantial truth of the imputations lies upon the defendant.

46 S140 of the Evidence Act 1995 provides:

“(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.

(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence, and
(b) the nature of the subject-matter of the proceeding, and
(c) the gravity of the matters alleged.”

47 In Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419, unreported, 24 December 2002, the Court of Appeal held that the standard of proof to be applied under s140(2)(c) is the standard referred to in Briginshaw v Briginshaw (1938) 60 CLR 336.

48 Here, the gravest of the imputations is that which accuses the plaintiffs of being “cheats”; other imputations accuse the plaintiffs of misleading conduct, deceptive conduct, and unfair trading. They could not be said to be as grave as the accusations in Marsden, or those which I considered in Cotter v John Fairfax Publications Pty Ltd [2003] NSWSC 503, unreported, 22 July 2003. They are, nevertheless, of some gravity, and I propose to apply a commensurate standard of proof. It is not a standard as high as that referred to in Briginshaw.

49 I shall deal with each pair of imputations in turn.

imputations (a) and (f)

“The first [second] plaintiff misled buyers because he [it] caused flats to be advertised for sale at an address that does not exist.”

50 In the light of exhibit G the truth of these imputations cannot be established. Indeed, no submission on behalf of the defendant suggesting that this imputation was true was advanced. Exhibit G was the correspondence between the first plaintiff on behalf of the second plaintiff and the Council concerning the creation of an additional street address to the property. In March 2000 the Council allocated the number “40” at Humphrey Place Kirribilli and referred to it as “the new address”. It said that its own records would show an alternative address of 40 Humphrey Place.

51 The defendant has failed to establish the substantial truth of these imputations.

imputations (c) and (h)

“The first [second] plaintiff is a cheat in that he [it] offers flats for sale to the public when they really would be buying into a boarding house with shared kitchens and bathrooms.”

52 Relying on the principles stated in [40] – [44] above, senior counsel for the defendant submitted that imputations (c) and (d) (and (h) and (i) are capable of being justified by establishing that:

“(a) the plaintiffs engaged in misleading or deceptive advertising with respect to the fact that it was a boarding house;

(b) knowing or intending to so mislead or deceive.”

53 This, no doubt, was at least partly in recognition of the circumstance that the defendant would be unable to establish that the units had shared bathrooms. The defendant also submitted that the concept of shared bathrooms added nothing to the essence of the imputation.

54 By contrast, counsel for the plaintiffs argued that those imputations could not be shown to be substantially true if only because the kitchens and bathrooms are not shared.

55 It is only in relatively recent times that the task of determining the substantial truth of defamatory imputations has been committed to a judge rather than a jury. That occurred with the extensive amendments to the Act in 1995. There is, accordingly, little guidance on the approach to be taken to that task. It is necessary to expose the reasoning process that leads to the particular result.

56 In my opinion, the issue of the substantial truth of these imputations is best considered by first breaking the imputations into their component parts. For the imputations to be shown to be substantially true, it is (in accordance with Howden) necessary that the defendant establish the substantial truth of each component part. The component parts of imputations (c) and (d) are:

(i) that the plaintiffs offered the units for sale as “flats”;

(ii) that, in reality, what was available for purchase were units or rooms in a “boarding house”;

(iii) that the units in fact available for purchase had shared kitchens and bathrooms;

(iv) that, by so conducting themselves, the plaintiffs deserved to be characterised as “cheats”.

57 Questions of construction of the imputations arise. The questions of construction are not necessarily susceptible of simple answer. This too, prior to 1995, lay in the domain of the jury. It is now necessary that the parties be placed in the position that they can appreciate the construction placed upon the imputations. What is the meaning of “offers flats for sale”? That is, at what point in the sequence of marketing as recounted above can it be said that the plaintiffs are “offering flats for sale”? Does this occur at the point of advertising, and on each occasion on which the plaintiffs advertise, promote, market or display the apartments? Or does that occur at the point when the contract is provided to the potential purchasers or his/her solicitor? Or does offering flats for sale encompass the entire process, culminating in the provision of the contract to the potential purchaser or his/her solicitor? These questions are of some significance, because the fate of the justification defence depends upon their answers. By that I mean this. If the plaintiffs can be said to be offering flats for sale on each occasion on which they are advertised, promoted, marketed or displayed for inspection, it may well be concluded that the plaintiffs were less than frank in their disclosures. For example, except in the brochure (exhibit E), the advertising did not alert readers to the boarding house nature of the development, or, in particular, to the fact that an apartment could not be owner occupied. (The first plaintiff sought to make light of this by putting emphasis on the word “style” attached to “studio”. This, he said, should have alerted a reader of the advertisements to the fact that what was being advertised was not a “studio-apartment” but something different, something less. He also pointed to the use, repeatedly in the advertisements, of the words “unique [or “rare”] business opportunity” and “investment”. This, he said, signalled to a reader the prohibition on owner occupation. I reject this. In my opinion, the advertising was calculated to disguise the true nature of the property available for purchase, and to entice home buyers, as well as investors, to the property. That would be of much greater significance if I concluded that “offering for sale” was co-extensive with “advertising for sale”. But I do not think this is so.)

58 I do not find the first question an easy one to resolve. However, on balance, I have come to the conclusion that the phrase “offers flats for sale” cannot be interpreted as meaning “advertises flats for sale” or “promotes flats for sale” or “markets flats for sale”. The process of offering real estate for sale involves more than advertising, promotion, marketing or displaying. It extends to the point of contract.

59 If this is correct, then, it cannot fairly be said that the plaintiff offered the units for sale as flats, disguising their true nature as rooms in a boarding house. That is because, as Mr Menzies said, the contract was entirely frank about the nature of the property. In this respect, also, the brochure exhibit E is relevant. That gave material information to those purchasers who took the trouble to read and digest it. The plaintiffs are not assisted by the omission from the brochure of the ground floor plan, showing the common kitchen facility; but this has to be seen in the light of the fact that the brochure was provided on site to members of the public who were actually physically inspecting the premises. They could not have been unaware of the existence of the communal kitchen.

60 I am therefore not satisfied that the defendants have established the substantial truth of the first component of these imputations. That is sufficient to reject the defence of justification thereto. However, others may take a different view, and it is appropriate to consider the remaining components. The second component, that what was available for purchase were units or rooms in a boarding house, is plainly correct and requires no further consideration.

61 Not so easy is the third component, at least in respect of the alleged shared kitchens. It is plainly not true that purchasers would obtain units with shared bathrooms. The evidence shows that each apartment was equipped with the bare essentials to create a kitchen, although even the first plaintiff in his cross-examination conceded that the facilities provided could not be described as a “conventional kitchen”. The truth is that each apartment did have its own very basic kitchen facilities but also had access to a shared kitchen. Again, and again not without hesitation, I have concluded that the substantial truth of this component is not made out. What is imputed, in my view, is that an occupant of an apartment would not have access to kitchen facilities other than shared kitchen facilities. This is not correct. That conclusion is strengthened by the patent falsity of the assertion that the occupants would have shared bathrooms.

62 I also reject the defendant’s contention that the notion of shared bathrooms is immaterial to the substantial truth of the imputation. That is of even more significance in the light of my conclusion that it is not true to say that the apartments had (only) shared kitchens. Accordingly, the defendant has failed to prove the substantial truth of this component of the imputations also.

63 Also difficult of resolution is the substantial truth of the next component. If my conclusion had favoured the defendant’s arguments in relation to the first three components, it would be necessary to consider whether conduct of that description amounted to “cheating”. If it could be shown that the plaintiffs were in fact offering units or rooms in a boarding house (on which there was a prohibition on owner occupation) disguised as “flats” (on which there was no such prohibition), and that the reality would not emerge until after completion of the purchase, that conduct would, in my opinion, warrant the description “cheating”. In order to reach that conclusion, it would not be necessary also to find that, contrary to the imputations conveyed, the apartments did not have shared kitchens or bathrooms. Certainly, shared kitchen and bathroom facilities are not what the ordinary reader of an advertisement, or potential purchaser, would anticipate if led to believe that he or she was inspecting a “flat”. But the offering for sale of rooms in a boarding house, disguised as conventional title apartments, flats, or units, with a significant restriction on use (if that were the fact) would be sufficient to warrant the description “cheating”.

64 However, for the reasons I have given, that is –

(i) that the offer of an apartment for sale was not complete until the provision of a contract;

(ii) that the apartments offered did not have only shared kitchens; and

(iii) that the apartments offered did not have shared bathrooms –

the defence of justification to imputations (c) and (h) fails.

imputations (d) and (i)

“The first [second] plaintiff has deceived members of the public by inducing them to believe they would be buying flats when in fact they would be buying into a boarding house with shared kitchens and bathrooms.”

65 For the reasons given in relation to imputations (c) and (h), the defendant has failed to establish that part of these imputations that asserts that purchasers would in fact be buying into a boarding house “with shared kitchens and bathrooms”. That is sufficient to dispose of the justification defence in relation to these imputations. If that were not the case, however, the defendant would be on stronger ground in relation to these imputations. Inducing members of the public to believe a particular scenario does not require a temporal, or necessary, connection with the provision of a contract, as does “offering for sale”. The evidence concerning the advertising and promotion of the apartments established, quite clearly in my opinion, that the plaintiffs and their agents carefully framed the terminology of their advertising in such a way as positively and actively to conceal the true nature of the property being offered. Indeed, in what might have been an unguarded moment, the first plaintiff almost conceded as much. The following extract from the transcript of the first plaintiff’s cross-examination is instructive:

“Q. I see. So do we take it that when you approved these advertisements, you took a conscious decision not to include any reference to there (sic) being rooms in a boarding house?
A. If your question is advertising regarding in the Sydney Morning Herald, the Mosman Daily and a sign board, that is absolutely, totally correct.
…

Q. Yes. So you chose, you made a decision that you would not, in your newspaper advertisements, convey to readers the fact that these were simply rooms in a boarding house; correct?

A. Advertising, the purpose of advertising is to get people there, to make enquiry and therefore then explain exactly what we were offering.

Q. If you advertised they were rooms in a boarding house you might not get people to come to the site?
A. They may very well not.” (Tt64-65)

66 This is of greater significance in the consideration of the contextual truth defence, to which I will come. If it were not for the last five words in the imputations, I would be satisfied that they have been shown to be substantially true. However, as I do not accept that those five words add nothing to the imputations, the defendant has not proved their substantial truth.

67 For the one reason I have given, the substantial truth of imputations (d) and (i) has not been made out.

imputations (e) and (j)

“The first [second] plaintiff did not trade fairly.”

68 Senior counsel for the defendant contended that these imputations have been shown to be substantially true by reason of the deceptive conduct of the plaintiffs in advertising the properties, the deceptions being concealing the true nature of the title, the advertising that only three apartments remained, and that the apartments were fully equipped. He also relied upon the annexure to the brochure (exhibit E) stating that the apartments could “generally” not be owner occupied. This, he argued, was a misrepresentation because there was, in reality, an absolute (not a general) prohibition on owner-occupations. This last proposition cannot survive examination of the Plan of Management, which came into existence as a condition of the development consent granted by Pearlman J.

69 Under the heading “Four: Tenure” the Plan requires residents to enter a lease or license agreeing to comply with house rules. The term of the lease is to be determined by management “on the explicit understanding that accommodation is not to be provided on a temporary basis to persons on recreational pursuits” (that is, this clause was framed to preserve the nature of the occupancy as low-cost permanent residency, and to preclude the use of the apartments as tourist or backpacker facilities). Thereafter appears the following, significant for present purposes, sentence:

“Owners of individual rooms are generally not to occupy their own rooms or other rooms, with all rooms being used in the conduct of a boarding house” (emphasis added, exhibit N, T96)

70 That establishes that the passage on which reliance was placed on behalf of the defendant was drawn directly from the conditions of consent. While the evidence does not establish that any exceptions to the prohibitions do exist, I do not think that the plaintiffs’ adoption of the terminology of the Land and Environment Court could be considered to constitute deceptive conduct.

71 It was not, however, true to say, as the plaintiffs did in their advertising, that the apartments were “fully equipped”; each individual unit had a bare modicum of kitchen equipment, and provision for only a little more. For anything except the most basic food preparation, occupants would be forced to use the communal kitchen.

72 The advertisement that only three units remained available for sale was also misleading, no doubt designed to impose some pressure on hesitant potential purchasers.

73 I am, therefore, satisfied that, in some respects, the conduct of the plaintiffs was deceptive. But that alone does not establish the substantial truth of the whole of these imputations.

74 Counsel for the plaintiffs drew attention to the verb “trade” around which these imputations are built. He submitted that the plaintiffs “traded” by selling the units, not by advertising them. Support for this construction may be derived from the Macquarie Dictionary (Revised Edition 1985) definition of “trade” as an intransitive verb which is, so far as applicable, in the following terms:

“14. to carry on trade [which, as a noun, is in turn relevantly defined as: ‘buying or …; purchase, sale or exchange’;]
15. to traffic;
16. to make an exchange.”

75 The point of this is that at the time of selling and buying, and, indeed at the time the contract was provided, there was no deception of potential buyers about any of these matters. There was no unfairness in the trading stage of the enterprise. Such deception, or unfairness as there was, occurred at the advertising and promotional stages, and was directed to luring potential purchasers to the building. More accurate information was also available at the premises in the annexure to the brochure.

76 That unfairness did not characterise the actual trading of the units is, perhaps, demonstrated by the outcome: even enthusiastic would-be purchasers, such as the Wildes, readily lost enthusiasm when solicitors examined the contract and exposed the reality of the nature of the title offered. No actual purchaser was, it seems, deceived, or at least there was no evidence that either of the two purchasers who were unrelated to the first plaintiff were deceived at the point of trading.

I am satisfied that the defendant has failed to prove the substantial truth of imputations (e) and (j), in that it has failed to prove any unfairness in the trading of the units.

77 The defences of substantial truth and public interest, or qualified privilege, fail.

contextual truth

78 The defence of contextual truth is provided by s16 of the Act. That section is relevantly in the following terms:

“(1) Where an imputation complained of is made by the publication of any report, article, … and another imputation is made by the same publication, the latter imputation is, for the purposes of this section, contextual to the imputation complained of.
(2) It is a defence to any imputation complained of that:
(a) the imputation relates to a matter of public interest or is published under qualified privilege,

(b) one or more imputations contextual to the imputation complained of:

(i) relate to a matter of public interest or are published under qualified privilege, and
(ii) are matters of substantial truth, and

(c) by reason that those contextual imputations are matters of substantial truth, the imputation complained of does not further injure the reputation of the plaintiff.”

79 The defendant’s plea in this regard is that each of the imputations pleaded on behalf of the plaintiffs (and found by the jury to have been conveyed and to have been defamatory) was published contextually to each other imputation so pleaded and found to be substantially true, and also contextually to four further imputations which, the defendant claims, were conveyed by the article. So far as the plea relates to the imputations pleaded on behalf of the plaintiffs, in the light of my conclusion that none has been shown to be substantially true, that can be put to one side. As was the case with the imputations pleaded on behalf of the plaintiffs, the defendant pleads virtually identical contextual imputations in relation to both plaintiffs. The contextual imputations for which the defendant contends are as follows:

“(i) The first [second] plaintiff is a cheat in that he [it] advertises flats for sale to the public when they really would be buying into a boarding house;

(ii) the first [second] plaintiff has deceived members of the public by inducing them in his [its] advertisements to believe they would be buying flats when in fact they would be buying into a boarding house;

(iii) that the first plaintiff is a dishonest businessman [that the second plaintiff dishonestly conducted business as a property developer];

(iv) that the first plaintiff is a property developer who sought to sell property by the use of advertisements which he knew were false and misleading [that the second plaintiff, as a property developer, sought to sell property by the use of advertisements which it knew were false and misleading].”

80 It will be appreciated that, in relation to the plaintiffs’ imputations (c) and (d), and (e) and (h) and, respectively, contextual imputations (i) and (ii), there are only relatively minor differences between the contextual imputations, and the plaintiff’s imputations. The defendant has done little more than adapt the plaintiff’s imputations, with only such modifications as are necessary to accommodate facts that emerged subsequent to publication. The fact that the differences are minor does not mean that they are insignificant. For example, contextual imputations (i) largely follow the form of imputations (c) and (h) except for two matters. In the contextual imputations the word “offers”, which appears in the plaintiffs’ imputations, becomes “advertises”; and the words “with shared kitchens and bathrooms” have been deleted. These variations remove those parts of the imputations which, the defendant obviously recognises, it is difficult to justify. The first adaptation shows some prescience on the part of the defendant’s legal representatives, who accurately anticipated the issue of construction that emerged, and, indeed, the conclusions I have reached. The deletion of the words “with shared kitchens and bathrooms” also evidences a realistic appraisal of stumbling blocks to their successful defence of the plaintiffs’ imputations.

81 In the second contextual imputation, the same words are omitted, and the word “in his [its] advertisements” are introduced after the words “by inducing them”. This latter alteration has the effect of making it quite clear that the deception alleged against the plaintiffs is said to have occurred at the time of, and in the process of, advertising. The variation removes any ambiguity or confusion, and the impediment to proof of substantial truth so created.

82 Contextual imputations (iii) are a significant departure from the plaintiffs’ imputations (e) and (j). Contextual imputations (iv) introduce a new concept.

83 As with the defence to substantial truth, in order to establish the defence of contextual truth it is necessary that the defendant establish that the publication in question either relates to a matter of public interest, or was made under qualified privilege. As I have indicated above, I am satisfied that the imputations, if conveyed, did relate to a matter of public interest.

84 The first question for determination in relation to this defence is whether the contextual imputations were in fact conveyed and, if so, were defamatory of either plaintiff. This is the task committed to a jury by s7A of the Act where the imputations in question are those pleaded on behalf of a plaintiff, but which is necessarily committed to a judge in relation to a defence of contextual truth.

85 Contextual imputations (i) and (ii) are so similar to plaintiffs’ imputations (c), (d), (h) and (i) that it is tempting simply to adopt the conclusions of the jury. However, that would be to abdicate the task committed to the trial judge and it is necessary that I give independent consideration to each of those matters.

contextual imputations (i)

“The first [second] plaintiff is a cheat in that he [it] advertises flats for sale to the public when they really would be buying into a boarding house.”

86 I have concluded that these imputations are not conveyed by the article. In saying so I am conscious that the jury took a different view in relation to the plaintiffs’ imputations (c) and (h), but the variations, apparently minor though they are, between the two sets of imputations which I have noted above have the effect, in my opinion, of changing significantly the impact of the article.

87 The key to this question lies in the use of the word “cheat”, which the defendant has adopted from the plaintiffs’ imputations. However, in the plaintiffs’ imputations it is said that the plaintiffs are “cheats” because they “offer flats for sale” in the circumstances outlined in the imputations. I have earlier held that if, indeed, the plaintiffs had “offered flats for sale” as described (as distinct from advertising or promoting them) then that would be sufficient to establish cheating. In the contextual imputations the plaintiffs are said to be cheats because of the manner in which they advertise flats for sale. While I am of the view that a person may be a cheat because of the way he/she/it offers real estate for sale, I do not think the same can be said of a person who merely advertises real estate for sale. Put another way, a victim may be cheated as a result of the manner in which real estate is offered for sale, but I do not think a person may be cheated as a result of the way in which real estate is merely advertised for sale. “Cheating” implies some actual loss to the victim. Having regard to the technicalities of real estate conveyancing, I do not think that mere advertising can result in a person’s being cheated. Certainly, it may result in such a person being misled but it cannot, on its own, result in any loss. Senior counsel relied upon the waste of time caused to potential purchasers misled by the advertising, and to their expenditure on legal costs incurred in obtaining advice in relation to the contract, but this cannot, in my opinion, prove cheating. Certainly there is something critical of the plaintiffs in the article, which clearly suggests sharp, undesirable, and deceptive practices in advertising, but it does not, in my view, convey the notion of cheating. The problem lies not so much in an analysis of what is contained in the article as in the juxtaposition of the two ideas contained in the imputations. (Even if that were not so, I would not find that part of the imputations that asserts “cheating” to be substantially true.)

88 I find that contextual imputations (i) are not conveyed by the article.

contextual imputations (ii)

“The first [second] plaintiff has deceived members of the public by inducing them in his [its] advertisements to believe they would be buying flats when in fact they would be buying into a boarding house.”

89 I am satisfied that these imputations are conveyed by the article. The opening paragraph refers to advertising; that is followed by the assertion that councillors fear that people buying the flats will not know that they have bought into a boarding house when they do their searches; and a councillor is reported to have expressed his concern that the strata units are being advertised as though the fact that it was a boarding house did not exist.

90 I am satisfied that the ordinary reasonable reader would interpret the article as suggesting that the plaintiffs had deceived members of the public by inducing them in their advertisements to believe that they would be buying flats when in fact they were buying into a boarding house.

91 I am equally satisfied that those imputations were defamatory of the plaintiffs.

contextual imputations (iii)

“That the first plaintiff is a dishonest businessman [that the second plaintiff dishonestly conducted business as a property developer].”

92 I find that these imputations were conveyed. The assertion of dishonesty emerges, in my opinion, quite clearly as early as the first paragraph. There it is suggested that “the boarding house” was advertising flats for sale at a non-existent address; thereafter it is suggested that the public would be misled about the nature of the title being advertised. The article goes so far as to attribute to the councillors a concern that, even at the conclusion of a conveyancing transaction, purchasers will not have acquired what they believed they were to acquire. It is for this reason that I am satisfied that the article is broad enough to convey an imputation of dishonesty in business on the part of the second plaintiff.

93 I am therefore satisfied that the article conveys the imputations that the first plaintiff is a dishonest businessman, and that the second plaintiff dishonestly conducted business as a property developer. I am satisfied that each of those imputations is defamatory of the relevant plaintiff.

contextual imputations (iv)

“That the first plaintiff is a property developer who sought to sell property by the use of advertisements which he knew were false and misleading [the second plaintiff, as a property developer, sought to sell property by the use of advertisements which it knew were false and misleading].”

94 Relying on much the same content of the article, I am satisfied also that these imputations are conveyed. There is the assertion that the flats are being advertised at a non-existent address, and that the result of that is that purchasers will be deceived as to the nature of their title.

95 I am satisfied that these imputations are conveyed and that they are defamatory of the plaintiffs.

substantial truth of the contextual imputations conveyed

contextual imputations (ii) (deceptive advertisements)

96 By these imputations the defendant focuses upon the nature of the advertisements placed by the plaintiff, and their effect upon members of the public. It is only necessary to return to the advertisements to which I referred in paras [17] – [24] above. The advertisements referred to the purchase of “brand new self-contained bedsitter-style apartments”; “studio-style aparts”; “strata residential investment”; or “residential investment”. The first plaintiff maintained that the word “style” following “studio” was a clear signal to a reader that, whatever the apartment was, it was not a “studio apartment”. In my opinion this attributes rather too much analytical content to what the reader of real estate advertisements, probably on a Saturday morning, and more interested in location and price than in deconstructing the fine terminology of the advertisement, does. I do not think that the insertion of the word “style” was likely to have given any inkling to readers that the apartments advertised were anything other than apartments with conventional title.

97 The same applies to the repeated references to the investment potential of the apartments. There was nothing in the advertisements that communicated to a reader the fact that the apartments may be purchased only for investment purposes and not for the purpose of owner occupation. It was because the apartments could be purchased exclusively for investment, and not for owner occupation, that set them apart from other real estate. I am satisfied that the plaintiffs did deceive members of the public by inducing them, in their advertisements, to believe that they would be buying real estate of a quality different from what was the reality. Contextual imputations (ii) are substantially true.

contextual imputations (iii) (dishonest business practices)

98 On behalf of the defendant it was submitted that these imputations would have been shown to have been substantially true if the advertisements were deceptive or misleading generally, and were so misleading and deceptive with the intention or the knowledge of the first plaintiff. I do not accept that this is the correct approach to considering the substantial truth of these contextual imputations. The nub of the imputations is dishonesty in the conduct of business. I have already expressed myself to be satisfied that the plaintiffs engaged in deceptive conduct in their advertising but this is a different concept to the dishonest conduct of business. “Business” here, in my view, necessarily encompasses the selling of the properties and, for reasons I have already expressed, I do not think that even the proved deceptiveness (let alone dishonesty, which, in my view, is a concept of greater seriousness) extended to the selling of the properties. I find that contextual imputations (iii) have not been shown to be substantially true.

contextual imputations (iv) (misleading advertising)

99 It follows from my earlier conclusions that I am satisfied that the defendant has proven that the plaintiffs engaged in false and misleading advertising. I have more hesitation in reaching a conclusion on the question of whether it has been shown that the plaintiffs “sought to sell property” by the use of false or misleading advertising. This question is only a little different from the question concerning trading, as to which I concluded that the preliminaries to sale and purchase did not amount to trading. However, these contextual imputations are framed a little differently. The true emphasis is on the use of advertisements. Certainly, the plaintiffs were seeking to sell property and, as part of their tactics in doing so, they used misleading advertisements. On balance, I have come to the view that these imputations have been shown to be substantially true.

100 That makes it necessary to consider whether, in the words of s16(2)(c) of the Act, by reason of the substantial truth of contextual imputations (ii) and (iv), the imputations pleaded on behalf of the plaintiffs do not further injure their reputations. In making these assessments I bear in mind the construction given to s16(2)(c) in John Fairfax Publications Pty Ltd v Blake; David Syme & Co Ltd v Blake [2001] NSWCA 434; 53 NSWLR 541. The approach is not to balance the relative defamatory content of the plaintiffs’ imputations against that of the contextual imputations, but to focus upon the substantial truth of the two proven contextual imputations set against the defamatory content of each of the plaintiffs’ imputations individually. The need to balance the substantial truth of the contextual imputations against each individual plaintiffs’ imputation follows from the language of s16.

101 In some respects the facts and circumstances that establish the substantial truth of contextual imputations (ii) and (iv) differ little from the content of the plaintiffs’ imputations. What the defendant has proved is misleading or deceptive conduct in the advertising of the real estate. There is no substantial difference in the defamatory impact of imputations (a) and (f), and (d) and (i), relative to that of the contextual imputations. For the purposes of assessing the relative defamatory impact (and bearing in mind the exercise required by Blake), the sting of the imputations is essentially the same. It is to do with misleading advertising. The circumstance that contextual imputations (ii) and (iv) are substantially true renders the defamatory impact of imputations (a) and (f), and (d) and (i) insignificant. The defence of contextual truth is made out in relation to those imputations. There will be a verdict for the defendant in the causes of action constituted by those imputations.

102 That is not the case in relation to imputations (c) and (h), or (e) and (j). The substantial truth of imputations asserting misleading and deceptive advertising does not outweigh the damage done to the plaintiffs’ imputations accusing the plaintiffs of cheating or trading unfairly.

103 The defence of contextual justification fails in relation to imputations (c), (h), (e) and (j).

the s13 defence

104 S13 of the Act provides:

“13 Unlikelihood of harm

It is a defence that the circumstances of the publication of the matter complained of were such that the person defamed was not likely to suffer harm.”

105 In written submissions it was argued on behalf of the defendant that the matter complained of was published under the following (relevant) circumstances:

“(a) This was the first development undertaken by the second plaintiff;

(b) the matter complained of makes no reference to either plaintiff;

(c) the matter complained of makes no reference to the specific address of the development other than that it is a development in Broughton Street, Kirribilli being advertising (sic) with a Humphrey Place address.”

106 I fail to see the relevance of the first of these asserted circumstances; and, given the jury finding that the plaintiffs were identifiable (and identified) by some readers, the second and third cannot be taken into account.

107 There is greater merit in the proposition that, because neither plaintiff was directly named in the article, the reach of the defamatory imputations is limited to those who were able to make the connection. For this purpose the defendant introduced into evidence the particulars of extrinsic facts of identification that had been put before the jury when the trial pursuant to s7A of the Act took place. It was suggested that only a very limited number of readers would have been aware of those extrinsic facts. In my opinion it was not necessary that any reader be shown to have known all of the extrinsic facts; some readers may well have had knowledge of one or more of those facts and been able to connect the article with either or both of the plaintiffs. It was also contended that the evidence revealed that only nine people, including the first plaintiff’s wife, identified either plaintiff. But this, too, I reject. The mere fact than only nine people have been produced by the plaintiffs does not mean that others did not identify the plaintiffs. It is impossible to know to what extent the defamatory content of the article was spread. It is not necessary that a recipient of the defamatory imputations was able to identify either plaintiff by name: recognition of them as the developers of the project would be sufficient: Channel Seven Sydney Pty Ltd v Parras [200] NSWCA 202, unreported, 1 July 2002.

108 I do, however, accept that the absence of the name of either plaintiff necessarily restricts the extent of the damage done to the reputation of either plaintiff and I will take this into account if and when I come to the question of damages.

109 I reject the defence under s13 of the Act.

qualified privilege – at common law

110 The defence of qualified privilege at common law has been the subject of the attention of appellate courts over the years: see, for example, Adam v Ward [1917] AC 309; Watt v Longsdon [1930] 1KB 130; Lange v The Australian Broadcasting Corporation (1997) 189 CLR 520; Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749. In Vilo v John Fairfax and Sons Ltd [2000] NSWSC 937, unreported, 6 October 2000, I held that the defence of qualified privilege at common law was generally unavailable in respect of a mass media publication. That decision was upheld on appeal: John Fairfax and Sons Ltd v Vilo [2001] NSWCA 290; 52 NSWLR 73.

111 The Mosman Daily is a mass media publication. This is established by the defendant’s answers to interrogatories showing that the estimated circulation of the newspaper for 26 July 2001 was 36,846, with an estimated readership of 73,000. This alone is enough to dispose of the defence of qualified privilege at common law.

112 However, on behalf of the defendant it was argued that the defence may be invoked in the context of political debate. Braddock v Bevins [1948] 1 KB 580 and Roberts v Bass [2002] HCA 57; 77 ALJR 292 were cited as authority for the proposition. Braddock and Roberts were both cases that arose in the context of parliamentary elections.

113 The proposition contended for on behalf of the defendant may or may not be correct: see Lange. Assuming it to be correct, it is unnecessary to spend more time considering its application to the present case. That is because the argument is founded upon a false premise. The premise is that the debate or discussion which took place at the Council meeting was a political debate. It was not. It was a discussion concerning the development approval that had been given to the second plaintiff by the Land and Environment Court, and the manner and extent to which he had or had not complied with the conditions, and the ramifications for residents of the Council municipality as a result.

114 The defence of qualified privilege at common law fails.

115 It is convenient now, before considering what remains of the defence of qualified privilege, to move to the defence of fair protected report. (That is because findings of fact relevant to the latter defence will affect the former.)

fair protected report

116 By s24(2) of the Act a defence is provided for the publication of a fair protected report, where the report is a report of proceedings of the kind specified in a lengthy catalogue in clause 2 schedule 2 of the Act. By sub-clause (9) proceedings of a public meeting, being a meeting which is open to the public, whether with or without restriction, held in Australia, so far as the proceedings relate to a matter of public interest, are specified as subject to the defence. By s26 the defence is defeated if, but only if, it is shown that the publication complained of was not in good faith for public information or the advancement of education.

117 At common law it was not necessary for a defendant, in order to succeed in the defence, to establish that the report was either a complete report of the proceedings in question, or that it was completely accurate. Substantial accuracy was sufficient to entitle a publisher to the benefit of the defence: see Chakravarti v Advertiser Newspapers Limited (1998) 193 CLR 519. There is no reason why that principle should not also apply to the statutory defence provided by s24(3) of the Act.

118 It was not in issue that the Council meeting of 16 July was a public meeting within the meaning of clause 2(a) of schedule 2. If Ms Hicks’ report was a fair report, then (subject to any defeasance established under s26), s24 protected its publication. Ms Hicks gave evidence by video link from the United Kingdom. A statement made by her, but undated, was admitted into evidence as exhibit 23; a notice of motion containing a proposed resolution which was before the Council and on which Ms Hicks had made some (mostly) shorthand notes became exhibit 24; her (also mostly shorthand) notes of the discussion were in evidence as exhibit 25; a typescript of those notes was in evidence as exhibit 26; the draft article she wrote, as submitted for publication, was in evidence as exhibit S. Ms Hicks’ evidence was that Council meetings usually took place on Monday evenings, and she was in the habit of attending. It was her normal practice on the following morning, Tuesday, to speak either to the Mayor or Council officers if anything had eventuated at the meeting which required clarification. That did in fact occur following the meeting of 16 July. Ms Hicks spoke to the Mayor about some of the matters that had been raised. The draft article was written by Ms Hicks by reference to her notes of the meeting, her recollection of what there occurred, a copy of the notice of motion which she had in her possession and what she had been told the following morning in the conversation with the Mayor. In her statement Ms Hicks attempted to source the content of the sequential paragraphs in the draft article she wrote. She believed it likely that the headline was the work of a sub-editor, drawing on what Ms Hicks had, in the draft, quoted the Mayor as saying. In summary, Ms Hicks believed that the contents of the paragraphs numbered 2, 4, 5, 6, 11, 12, 13 and 14 constituted an account of what had occurred in the meeting, either during the discussion or from the document containing the proposed resolution. The contents of paragraphs 7, 8, 9 and 10, she believed, were the result of her subsequent conversation with the Mayor. Ms Hicks did not contact the plaintiffs for their comments. They were not named in the meeting, she did not know who they were, and she considered it unnecessary to make further inquiries in that respect. This, she said in evidence, was because she had been taught that she was entitled to report the proceedings of a Council meeting. Her contact with the Mayor the following morning was made in order to ensure accuracy and to clarify some aspects of the discussion.

119 There are three significant differences between the typescript of the shorthand notes taken by Ms Hicks and the content of the article as it finally appeared. In her notes Ms Hicks recorded that Ms Sue Frances, the Council’s Planning Director, said:

“I have to establish the Council has not issued a number.”


(I take this to mean a number for the newly allocated Humphrey Place address.)

But this did not find its way into the article as published. Ms Hicks included in her original manuscript for the article a reference to Councillor Gibson’s remark. In the paragraphs numbered 1 and 3 are references to the statement that the address did not exist, but there is no recognition of the doubt subsequently cast upon that by Ms Frances.

120 Secondly, Ms Frances said, in the meeting:

“I am happy to write to the selling agents, however there is no onus on the selling agents to tell anyone.”

This inexplicably translated into the paragraph numbered 14 in the article, making a directly contrary assertion.

121 The third discrepancy is derived from a passage at the end of her notes, representing the conclusion of the discussion. Ms Hicks recorded a Councillor, Councillor Jilly Gibson, in the following way:

“Said no access to these units from Broughton Street. Said only access was from Humphrey Place.”

122 In cross-examination Ms Hicks conceded that the deletion of Councillor Gibson’s reference to access to the building from Humphrey Place had the result that the balance of the article was affected, obviously in a way that was unfair to the plaintiffs.

123 There are three independent reasons why the defence of fair protected report must fail.

124 Firstly, the article does not make it plain that it is, or purports to be, a report of a relevant meeting. The first reference to “a meeting” is in the paragraph numbered 7 and, while a reader might infer that the meeting to which reference was made was a meeting of the Council, that is not explicit. Ms Hicks herself described her failure to make explicit that she was reporting on a Council meeting as “a terrible oversight” (T212). The extent to which attribution such as to convey to the reader that the publication is, or purports to be, a report of a relevant event as required was considered, in relation to a report of a proceedings of court, by the Court of Appeal in Nationwide News Pty Ltd v Rogers [2002] NSWCA 71, unreported, 15 March 2002.

125 To an extent, the court divided on this issue. Stein JA (in the minority) considered that:

“[112]…direct attribution of a judgment is not required for the defence of fair protected report to succeed. It is sufficient if it is clear on its face that the report is of a decision or a judgment given in court. In this case it is plain that the subject matter of the article is a judgment handed down by Hill J in the Federal Court in Sydney on the preceding day. There are numerous references in the article to the Federal Court, the ‘test case’, the ‘landmark ruling’, as well as three references to Hill J, including one verbatim quote.”

126 Mason P, with whom Grove AJA agreed, held:

“[7] The article did not publish the judgment or a copy of the judgment. To qualify for the defence the appellant therefore had to show that the article conveying the defamatory imputation was ‘ a fair extract or fair abstract from, or fair summary of, the protected report’ (i.e. the judgment of Hill J) (See Defamation Act 1974, s24(3)). .
[8] In my opinion the defamatory portions of the publication that gave rise to the actionable imputation did not satisfy this requirement because they were not expressly or impliedly attributed to the judgment.
[9] I shall endeavour to explain why such attribution is a necessary part of the defence.
[10] The essential point is that a requirement of attribution places the onus on the reporter to differentiate between the event reported (here court proceedings) upon which the reporter’s privilege is derivative on the one hand; and background information, statements of fact or the reporter’s own commentary, on the other hand. The reader is thus enabled to assess and weigh the information by recognising its various sources. Since ex hypothesi one is dealing with defamatory material it is not unreasonable to require such discrimination.
[11] The entirety of a publication may purport (expressly or impliedly) to be a report, in which event the privilege may descend on the entirety if otherwise available. The matter presently complained of does not fall into this category.”

127 In my opinion, in the present case, to the extent that the reference to “a meeting” could be taken to be a reference of a meeting of the Council, it is inadequate to meet the test propounded by Mason P. Indeed, it is inadequate to meet the alternative test propounded by Stein JA.

128 The second reason the defence fails is related, but independent. As the evidence made plain, only part of what Ms Hicks reported was drawn from the meeting. Much of it, and, indeed, much of the defamatory content of it, was taken from her conversation with the Mayor the following day. The article failed to differentiate between those passages which did constitute a report of what had occurred at the meeting, and what Ms Hicks had derived from her conversation with the Mayor. For this reason the article could not be characterised as a fair report of a relevant meeting.

129 The third reason concerns the fairness and accuracy of the report, to the extent that it was a report of a Council meeting. This, in turn, is for two reasons. Firstly, Ms Frances was misquoted as saying that the onus lay upon the real estate agents to advise potential purchasers of the nature of the development. This, alone, may be of relatively small significance. However, a significant part of the article, including that which appears in the first substantive paragraph, lay in the assertion that the apartments were being advertised for sale at a non-existent address. It was, therefore, of some importance (as Ms Hicks conceded) to include reference to the remark made by Councillor Gibson, putting that assertion in some kind of perspective. The fact that the councillors were plainly misled or misinformed does not affect the fairness of the reporting of what they said; but it is of some significance that Ms Frances is noted in Ms Hicks’ record as having said that she would have to check the circumstances of the address. This can only be taken to have cast some doubt on the accuracy of what had been asserted, and should, therefore have been included in some way.

130 The defence of fair protected report fails.

qualified privilege – s22 of the Act

131 S22 of the Act, as it applied at the time of publication of the article, was in the following terms:

“22. Information

(1) Where, in respect of matter published to any person:
(a) the recipient has an interest or apparent interest in having information on some subject,
(b) the matter is published to the recipient in the course of giving to the recipient information on that subject, and
(c) the conduct of the publisher in publishing that matter is reasonable in the circumstances,

there is a defence of qualified privilege for that publication.

(2) For the purposes of subsection (1), a person has an apparent interest in having information on some subject if, but only if, at the time of the publication in question, the publisher believes on reasonable grounds that that person has that interest.

(3) Where matter is published for reward in circumstances in which there would be a qualified privilege under subsection (1) for the publication if it were not for reward, there is a defence of qualified privilege for that publication notwithstanding that it is for reward.”

132 The submissions made on behalf of the defendant in relation to this defence were, with respect, confused. They ran together the provisions of s22 and the principles stated by the High Court in Lange. The Lange principles may conveniently be drawn from the headnote to the report of the decision in the Commonwealth Law Reports. The headnote relevantly states:

“(1) that, in proceedings for defamation, the categories of qualified privilege in defence of a claim include a communication made to the public on a government or political matter, including discussion of government or politics at a State or Territory or local government level.
…
(2) That a publisher relying on that category of qualified privilege to protect a publication that would otherwise have been held to have been to too wide an audience must establish that its conduct in making the publication was reasonable in all the circumstances. As a general rule, a defendant’s conduct in publishing defamatory material will not be reasonable unless the defendant had reasonable grounds for believing the defamatory imputation was true, took proper steps so far as they were reasonably open to verify the accuracy of the material, and did not believe the imputation to be untrue. The privilege will be defeated if the plaintiff proves that the publication was actuated by ill will or other improper motive.”

133 In a joint judgment all seven members of the High Court agreed:

“Accordingly, this Court should now declare that each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia. The duty to disseminate such information is simply the correlative of the interest in receiving it. The common convenience and welfare of Australian society are advanced by discussion – the giving and receiving of information – about government and political matters . The interest that each member of the Australian community has in such a discussion extends the categories of qualified privilege. Consequently, those categories now must be recognised as protecting a communication made to the public on a government or political matter . It may be that, in some respects, the common law defence as so extended goes beyond what is required for the common law of defamation to be compatible with the freedom of communication required by the Constitution. For example, discussion of matters concerning the United Nations or other countries may be protected by the extended defence of qualified privilege, even if those discussions cannot illuminate the choice for electors at federal elections or in amending the Constitution or cannot throw light on the administration of federal government.
Similarly, discussion of government or politics at State or Territory level and even at local government level is amenable to protection by the extended category of qualified privilege, whether or not it bears on matters at the federal level. Of course, the discussion of matters at State, Territory or local level might bear on the choice that the people have to make in federal elections or in voting to amend the Constitution , and on their evaluation of the performance of federal Ministers and their departments. The existence of national political parties operating at federal, State, Territory and local government levels, the financial dependence of State, Territory and local governments on federal funding and policies, and the increasing integration of social, economic and political matters in Australia makes this conclusion inevitable. Thus, the extended category of common law qualified privilege ensures conformity with the requirements of the Constitution. The real question is as to the conditions upon which this extended category of common law qualified privilege should depend.” (pp 571-572, emphasis added)

134 The High Court categorised the principle stated above as creating an “extended category of qualified privilege”, which arises only when the defamatory matter concerns “government or political matters”. In those circumstances, and only when “the extended category of qualified privilege” is invoked to protect a public action that otherwise would fail to attract a defence of qualified privilege, by reason of the breadth or width of its publication, reasonableness of conduct is imported as an additional element. That is, in the relevant circumstances, it will be necessary for a defendant who invokes the defence to prove, in addition to the other matters, that his/her/its conduct was reasonable.

135 The High Court repeatedly used the phrase “government and political matter(s)”. The first question for determination in relation to this defence is whether the defendant has shown that the subject matter of the article was “a government or political matter”. I have already rejected the suggestion that the debate in the Council was of a political character. The references in Lange to “government matters” extending to local government are seductive, but I do not think the High Court intended to include in the “extended category of qualified privilege” discussion of the kind of issue under consideration at the Council meeting. Their Honours explained the incorporation of local government matters by reference to the interconnection of the various tiers of government, and their connection with the Constitution. I am satisfied that, by no stretch of the imagination, could the discussion at the Council meeting properly be described as a debate or discussion about “government or political matters”. As I have held in relation to the defence of qualified privilege at common law, the councillors were expressing their concerns, not about matters of policy or government, but about what they perceived to be the flouting by the plaintiff of the terms of the development consent, and their opposition to the development consent that had been granted by the Land and Environment Court.

136 Accordingly, the defendant fails at the threshold to make out what I might call a Lange defence. In any event, the defendant has failed to show that its conduct in the publication was reasonable. This is because:

(i) the defendant made no attempt to verify the assertions made at the meeting;

(ii) the defendant made no attempt to identify the plaintiffs, or to give them an opportunity to comment on, or rebut, what had been said; and

(iii) there were material omissions from the account of the meeting, which coloured, adversely to the plaintiffs, the picture.

137 Had the defendant reported the meeting fairly (and accurately) it would not have been necessary, for the purposes of the defence of fair protected report, to verify the assertions made at the meetings, or to give the plaintiff an opportunity to comment or correct any inaccuracies. But the fact that a defendant is excused, in fairly and accurately reporting a public meeting, from undertaking those exercises, does not mean that it is also excused from doing so before claiming the privilege provided for by s22, or under the Lange principles. Reasonableness of conduct is an essential element of this defence, under whichever rubric it is claimed.

138 The defendant’s reliance upon qualified privilege under the Lange principles fails.

139 So also does its reliance upon the defence provided by s22 of the Act. The reason for this is the failure of the defendant to establish that its conduct was reasonable in the circumstances.

DAMAGES

140 All defences having failed in relation to four imputations, it is necessary to turn to the question of damages. I accept, where defamatory imputations have been published of a plaintiff, damage is presumed: see, for example Libel and Slander, Gatley, 9th Edition, para 32.43. I also bear in mind that, although these defamatory imputations were published in a mass media newspaper, neither plaintiff was named and, although the evidence establishes that they were readily identified by some readers, the extent of the identification must have been limited as, therefore, must the damaging impact of the publication of the imputations.

141 A verdict and an award of damages in a defamation case operates to assuage the feelings of the plaintiff (here only the first plaintiff) and to vindicate the damage done to the reputations of both plaintiffs.

142 I shall deal briefly with the evidence concerning the effect of the publication upon the plaintiffs.

143 The first plaintiff first became aware of the article on the day of its publication when he received a telephone call from his wife who read it to him. He immediately went home and read the article for himself. He said that to describe himself as “upset” would be an understatement; he said he had spent three years fighting the Council, had achieved finalisation of the development, had had the property open on a number of occasions with a great deal of interest, and had spent a great deal of time, money and effort in bringing the project to completion. He was angry, his lunch was ruined (he said this would be “a major understatement”), and that he thought that what should have been coming to an extremely pleasant result was turning to disaster. He then felt hurt and anxiety. He had many sleepless nights. He felt that there was no way of recouping his position. Although he did not use the word, the evidence he gave made it clear that he felt betrayed by the defendant, with whom he had advertised the property. He felt distressed at the content of the headline, and felt that it was unfair and incorrect. He was particularly distressed by the assertion that the Humphrey Place address was non-existent. There is more evidence but it is unnecessary to recount it. It was of the same nature.

144 He received some telephone calls from acquaintances, including a real estate agent. Some made jokes which exacerbated the plaintiff’s feelings of upset. There were also some face to face conversations with acquaintances. He felt that the publication had damaged the prospects of the second plaintiff, for whom the project was a first endeavour and the name of which he had himself especially selected. The numbers inspecting the property in subsequent weeks diminished, the first plaintiff thought to less than a quarter of their previous level. The first plaintiff had the impression that he and his wife received fewer invitations to social functions than previously.

145 The first plaintiff said that the falsity of the imputations caused him upset. So also did his knowledge that the solicitors for the defendant, in preparation for the trial, had issued subpoenas, one for the production of his criminal record (of which he had none) and one served upon the “Community Affairs Department” (sic) – presumably the Department of Community Services – although it was not clear what records were sought from that organisation.

146 Reputation evidence was called from a number of witnesses. Mr Mathew Gordon, a builder, had known the first plaintiff since about August 2000 and had worked for the second plaintiff on the project. He said, in relation to reputation, that his experience of the first plaintiff prior to the publication was that he was an honest business person, but that his reading of the article caused questions to arise in his mind concerning the legitimacy of the development and the first plaintiff’s honesty. He agreed, in cross-examination, that once the first plaintiff explained the facts to him he accepted what he was told and his previous high opinion of the first plaintiff was reinstated.

147 Mr William Stinson, also a builder, had known the first plaintiff since about 1993 in a professional capacity, and described his reputation as “impeccable”. He said that when he read the article he was “concerned” and that doubt was cast upon his integrity. His high opinion of the first plaintiff was also restored following a clarifying discussion with him. Mr Alan Wadey, a graphic artist, had known the plaintiff for about twenty years and saw him regularly during that time. He said the first plaintiff’s reputation was “fine” as was his reputation for honesty (this answer being given from his own experience of working with the first plaintiff and was not, strictly, of reputation). He read the article on its publication and “thought it made his company look dodgy”.

148 He was concerned that he may not have been paid for some work he had done for the second plaintiff but he was paid and his high opinion of the second plaintiff was restored.

149 The plaintiff’s wife gave evidence but it was of a very limited nature. She confirmed that she had told the first plaintiff about the article, had given it to him, and said that he was extremely angry and that she had never seen him so angry. She said, in cross-examination, that she and her husband continued to attend social occasions and functions in the normal way. She said nothing about any reduction in the number of invitations they received.

150 I will return to the quantification of damages in due course.

151 The plaintiff also claims to be entitled to aggravated compensatory damages on a variety of grounds. The NSW Court of Appeal considered the question of aggravated damages in Andrews v John Fairfax and Sons Ltd [1980] 2 NSWLR 225. There Glass JA quoted with approval a passage from the speech of Lord Reid in Cassell and Co Ltd v Broome [1972] AC 1027 at 105, to the effect that where the conduct of the defendant is relevant and “high-handed, malicious, insulting or oppressive”, that behaviour may aggravate the injury and justify an increased award of damages.

152 But in Clark v Ainsworth (1996) 40 NSWLR 463, Sheller JA and Abadee AJA held:

“Only unjustifiable or improper conduct by the defendant can be taken into account in giving aggravated damages.”

153 In support of his claim for aggravated damages, the first plaintiff relied upon three matters. These were:

(i) the asserted falsity of the imputations;

(ii) the failure on the part of the defendants to make enquiries before publication;

(iii) the conduct of the litigation.

(i) falsity of the imputations

154 My conclusion that the defendant has failed to establish the substantial truth of any of the imputations does not necessarily, in my view, have the result that their falsity, per se, exacerbates the damage, or the injury to the plaintiff’s feelings. Although no imputation has been shown to be entirely true in substance, each could be said to be true in part. My conclusions make it clear that I am satisfied that the advertising undertaken by the plaintiffs was misleading, and deliberately so; and that, to a point, there was some unfairness in the manner in which the plaintiffs promoted and marketed the development. Also to be taken into account is my conclusion that two of the contextual imputations had been shown to be substantially true. It would be anomalous, in my view, to aggravate the plaintiff’s damages by reason of the falsity of the imputations, when the reality is that some parts of the imputations were substantially true. I therefore decline to make an award of aggravated damages on this basis.

(ii) failure to make enquiries

155 Although it would have been better had Ms Hicks made enquiries of the first plaintiff before publication, her conduct was not “unjustifiable or improper” as required by Clark v Ainsworth. Ms Hicks explained her reasons for not making enquiries. Firstly, the plaintiffs were not identified at the Council meeting and she did not know who they were: (but this has to be seen in the light of the ease with which, had she wished to do so, she could have identified the plaintiffs and made enquiries). Secondly, Ms Hicks believed that, because she was reporting the events of a Council meeting, proper practice did not require that she make enquiries or set out the other side of the story. This was a justifiable view in the circumstances; it was the fact, in part, of errors in the reporting and of the amalgamation of a report of the Council meeting, and a conversation with the Mayor, that deprived the article of the defence of fair protected report. On this occasion I do not see the failure to make enquiries as a matter that should aggravate the damages to be awarded.

(iii) conduct of the litigation

156 Two individual matters were relied upon here. During the cross-examination of one of the witnesses, the first plaintiff briefly left the court. While in the corridor outside he spoke briefly to Ms Mason. He said that she looked nervous and he greeted her. When Ms Mason was cross-examined, senior counsel for the defendant put to her (as a positive proposition) that the plaintiff had communicated to her the nature of the questions he had been asked in cross-examination. Ms Mason denied that that was so. The point made by counsel for the plaintiff was that, particularly having regard to the manner in which the question was put (that is, as a proposition rather than a question), additional anger and distress was caused to the first plaintiff.

157 It is not clear on what basis the question was put to Ms Mason, or what instructions the cross-examiner had to do so. The issue was quickly abandoned and not taken up again. Unless the cross-examiner had specific instructions as to the conversation between the first plaintiff and Ms Mason, it was a dangerous proposition to put. However, in the overall assessment of this litigation, I do not think that one single question could reasonably be taken as aggravating the damage to the first plaintiff. Certainly, it could not be said to have increased any damage to the reputation of either plaintiff.

158 The final matter put in support of the claim for aggravated damages concerned submissions put on behalf of the defendant to the effect that the plaintiff was not a truthful witness and that, unless corroborated, his evidence should not be accepted. This argument, regrettably, requires some examination of the evidence given by the first plaintiff. This I have so far avoided because, as it seemed to me, and as I have earlier observed, the area of factual dispute was relatively narrow, and my determination has not depended upon the resolution of competing factual scenarios. In disposing of this part of the argument I must observe that the first plaintiff was, in some respects, not a satisfactory witness. I do not say this by reason of any particular assessment of his demeanour, but from an analysis of the transcript of some of the answers given by him in cross-examination. I will limit my observations to two passages. At T45 and thereafter the first plaintiff was being cross-examined about an expert report that had been put, on behalf of the second plaintiff, before the Land and Environment Court. The report contained the following:

“Importantly, no cooking facilities are proposed in any room, other than a power outlet for a jug or toaster.”

and

“The design is not intended to provide for individual self contained kitchens.”

When asked if he had read that the first plaintiff replied:

“I may have read it, yes.”

159 When asked the same question again he acknowledged that he had read it and added that he did not necessarily agree with it. The first plaintiff was then asked if he had known that the expert intended to give evidence in the Land and Environment Court deposing that what was contained in the report was true to the best of his knowledge. The first plaintiff replied:

“You are asking if it is true. The answer is it’s not up to me to know whether it is true or not.”

I here interpolate that while the answer that the first plaintiff “may have read” the report was evasive, this last answer was disingenuous. The question was repeated, and the first plaintiff replied:

“He may have believed it to be true, yes.”

The first plaintiff finally acknowledged that the paragraph referred to was:

“inaccurate in my opinion …”,

and that he “may have” told the consultant that. Finally the first plaintiff resorted to asserting that the statement in the report was not false, but was an opinion of the consultant. When challenged about the characterisation of that statement as an opinion, the first plaintiff (quite irrelevantly) said that, at the time the report was written, he thought the building was not finished.

160 In another passage (T111) the first plaintiff was cross-examined about advertising that “only three” apartments remained available for sale. He said that other apartments “may very well have been let and not offered for sale” and that he may have decided at that time not to sell them.

161 There were a number of occasions on which the first plaintiff had to be directed to answer the question put to him. I did not receive the impression that the first plaintiff was doing his best to give frank information to the court. Rather, he was defensive, and engaged in sparring with the cross-examiner. He sought to second-guess the cross-examiner, to anticipate the purpose of the questions, and to avoid giving direct answers in case they damaged his case. In these circumstances I do not think that the submissions put on behalf of the defendant in relation to his credibility could be treated as unjustified or unjustifiable.

162 Accordingly, I do not propose to make an award of damages which includes any component of aggravated damages.

163 In quantifying damages I bear in mind that no claim for economic loss is made by either plaintiff. The first plaintiff believed that the loss of interest in the development could be attributed to the publication but this did not (and in my opinion, could not) translate into a claim for loss of sales. By far the more likely explanation for the failure of the apartments to sell was advice of the kind given by Mr Menzies. Even if the publication of the article had the effect of diminishing public interest, that cannot be shown (and is not shown) to be causally related to the failure to sell. That would, most likely, have occurred in any event.

164 In my opinion, the identification of the first plaintiff was very limited indeed and generally confined to people who knew him as the developer of the property and short-lived because he was able to put the concerns of those individuals to rest.

165 I bear in mind the likelihood that others, who did not raise the matter with the first plaintiff were likely also to have identified him, but, as I have said, I do not think that this was widespread.

166 In relation to the second plaintiff, and on the authority of Parras, it was not necessary, for the article to have a defamatory impact, that readers identify it by name. To identify it as the developer of the project would be sufficient. But it is important to limit the assessment of damage to that done to its reputation, and to steer well away from any damage that would more properly lie in the category of loss of sales or business.

167 Each imputation found to have been conveyed constitutes a separate cause of action. In some cases it is appropriate to make individual awards of damages in respect of imputations found to have been conveyed and not successfully defended. Here, each plaintiff is entitled to an award of damages in respect of two imputations that fall within that classification. I do not, however, consider it necessary or appropriate to award damages separately in relation to each imputation. A composite award of damages in respect of each plaintiff is adequate.

168 I assess the damages to be awarded to the first plaintiff at $20,000. I assess the damage to be awarded to the second plaintiff at $30,000.

169 The orders I propose to make are:

In relation to imputations (a), (d), (f) and (i):

(i) verdict for the defendant;

In relation to the imputations (c), (h), (e) and (j):

(ii) verdict for the first plaintiff in the sum of $20,000

(iii) verdict for the second plaintiff in the sum of $30,000.

170 I will hear the parties in relation to costs, interest, and any other matters that remain outstanding.

171 I will direct the parties, in due course, to bring in short minutes of order reflecting my conclusions.

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Last Modified: 08/28/2003